China's Ambitious Plans

In the May number of The Atlantic is an article on China by H. R. McMaster, who is both a retired United States Army lieutenant-general and a former national security advisor for the White House. It is either an eye-opening article or a deceptive one. I think the magazine fact-checks its articles, so I expect that this one is honest and eye-opening. Basically, it strips China of its clothes of respectability. And when I say China, I mean the Chinese Communist Party leadership. The author describes the Trump visit to China in 2017, a visit in which the author took part. Things he heard said that I had not previously seen reported reiterate that China is aiming to set itself up as the go-to nation of the world, with other nations as its tributaries. McMaster recounts the premier of China, Li Keqiang, asserting that America’s role in this new order was to provide energy and raw materials to China. Hewers of wood and drawers of water is the Chinese vision of Americans. 

The article affirms my already formed opinion that China has given up on looking respectable now that other nations are catching on to her. It’s full steam ahead to economically conquer a major part of the globe before China’s population ages into senility. Decades of the one-child policy is a demographic disaster. The ratio of workers to those that need support will tax China’s viability. A nation like Japan that has advanced artificial intelligence and robotics to sophisticated levels can cope with the decline in worker numbers. China doesn’t have the tech creativeness to do that. China’s technological innovation comes through theft and coercion. Is that because the Chinese are less intelligent than other people?  Not at all. One has only to see what 23 million Taiwanese have accomplished to know that Chinese are intelligent and industrious people. The problem with communist China is that it is communist. Initiative is stifled. When the CCP finally goes the way of other feudal regimes, China will likely break up into several sovereign jurisdictions, but after the inevitable famines and civil wars, the Chinese will produce intellectual stars.

Children of an Anxious Age

There is an enlightening article in the May number of The Atlantic called Childhood in an Anxious Age. I have been interested in a phenomenon I see among Gen-X and millennials: anxiety. I recommend the article to anyone with an interest in anxiety issues. The article discusses the effective therapies of Cognitive Behavioral Therapy (CBT) and Supportive Therapy for Anxious Childhood Emotions (SPACE). What I have learned from the article includes that adult-onset anxiety is rare: if you are anxious as an adult, you likely were anxious as a child. 

I also learned that children who are anxious tend to be those without coping skills, and the reason they are short on coping skills is that they have not been allowed to develop them. Adults in their lives tend to intervene to take over the kids’ problems. 

It is important to allow children to be tested by life and to meet the challenges. They learn to handle problems by being allowed to. Intervening in the natural development of coping skills does a disservice to the child that can severely impair him for a lifetime.

How does the CEWS Affect SRED Credits?

The CEWS will reduce the amount of eligible SRED expenses for those companies who do SRED and who collect benefits under the CEWS program, but it may not be a dollar for dollar. So, just how will it work?

If a company is choosing the file using the traditional method, then eligible wages will be reduced by the amount of CEWS benefits pertaining to those wages, and that is pretty straight forward. For example, suppose there is a total payroll of $125,000 and it has been determined that $50,000 of the cost was SRED work. Further suppose that $40,000 has been received under the CEWS program and that a reasonable allocation is to attribute $15,000 of that amount to the eligible SRED wages. SRED wages would now be $35,000, or 70% of the 50k.

If a company is filing under the proxy method, the $50,000 of eligible wages effectively yields $77,500 of SRED expenses (provided the company’s overhead justifies the $27,500 bump-up), and that amount would be reduced by the $15,000 of the CWES benefits allocated to SRED labor, leaving $62,500, or 125% of the 50k.